Last editedMar 20233 min read
Setting up your first ecommerce store is an exciting step for any business. The right blend of marketing and user-friendly design allows you to put your brand out there. Yet along with selecting the perfect graphics, layout, and features, you’ll also need to think about the best payment processing solution for ecommerce. Here’s a closer look at how ecommerce payment processing works, along with a few of the best options.
What are ecommerce payment processing solutions?
Online shoppers can choose from a variety of payment methods. Ecommerce websites have a checkout page showcasing these various methods, which usually include credit and debit cards at minimum. Additional options include things like digital wallets, Buy Now Pay Later solutions, and even cryptocurrency.
To process any of these payments, you’ll need a payment gateway and payment processor. A payment gateway connects your ecommerce platform to the processor, collecting customer data and submitting it for authorisation. The payment gateway is the client-facing portal where a customer can enter their payment details.
By contrast, the payment processor receives these payment details and submits them to the business’s merchant account and bank. The processor serves as a third-party intermediary between the ecommerce site and issuing bank or payments provider. At the processing end of the transaction, money is taken from the customer’s account and debited into your merchant account.
Some payment processing solutions serve both functions, giving an all-in-one option for those seeking a payment gateway and processor. In any case, they’ll use tools like encryption to protect customer data as it’s sent for verification. They’ll also take care of authorisation, which might entail added security features like two-step verification.
There are three types of payment gateways for ecommerce businesses to choose from.
Redirecting gateways: These redirect customers to a separate third-party page to complete the transaction. PayPal is one example of this type of gateway.
Onsite checkout: These allow customers to complete checkout on the ecommerce site. Payment processing then takes place offsite. Stripe is an example of this type of gateway.
Onsite payment: This type of solution allows both checkout and payment to be processed directly on the ecommerce site. This enables more flexibility, but also comes with added responsibilities for your business since you’re fully in charge of payment security and efficiency.
Features of the best ecommerce payment processing platforms
No matter which type of gateway and processor you’re looking at, it’s important to make sure it offers some key features:
PCI compliant
Uses tokenization and encryption
Accepts popular payment methods
Offers a transparent fee structure
Is easy to integrate with your site
User-friendly interface
Examples of ecommerce payment processing solutions
There are dozens, if not hundreds, of ecommerce payment processing solutions on the market. Here are a few of the biggest names you might be familiar with.
1. GoCardless
GoCardless is one of the best payment processing solutions for any ecommerce business. It offers streamlined integration directly into your website with out-of-the-box checkout pages. It doesn’t take card payments, which trigger high fees, allowing GoCardless to offer more competitive pricing for businesses of all sizes.
You can collect both instantly confirmed payments (using Instant Bank Pay) and scheduled recurring payments (using Direct Debit), either directly through the GoCardless dashboard or via one of hundreds of integrations with favourite business software solutions including Xero, Sage50, and QuickBooks.
2. Square
Another example is Square, which works both online and in-person. This makes it a good option for retailers who maintain a brick-and-mortar storefront or sell products at markets yet want to maintain a website for online purchases.
3. PayPal
PayPal is perhaps one of the most well-known names in payment processing worldwide. It enables both credit and debit cards along with payments taken directly from customer PayPal accounts. Customers do need a PayPal account, which can cause friction. Newer features include buy now, pay later services, social media payments and PayPal Credit.
4. WorldPay
This payment processor offers a selection of different ecommerce packages and accompanying price plans. Online businesses receive a virtual terminal and corresponding app enabling international payments, including credit and debit cards.
5. Stripe
Stripe is PCI certified to help you accept credit and debit card payments on your website. This payment gateway is available in numerous countries to accept international transactions. It also works with several digital wallets like Apple Pay and Google Pay, giving your customers plenty of options. Working with cards, it tends to have high fees, and users can have difficulties accessing customer support when needed.
How to choose the best payment system for your ecommerce business
Many ecommerce businesses will choose more than one payment system, depending on the nature of your products and marketplace. For example, you could choose a system like WorldPay or Stripe to accept card payments, blending it with GoCardless for bank payments, which tend to be cheaper than cards.
GoCardless’s online payment system offers numerous advantages. We put businesses in control of payments, taking payment on the day it’s due. We also offer an intelligent retries solution called Success+, which cuts down on failed payments by 76% on average. Eliminate the stress of outdated ecommerce payment methods by putting today’s technology at the heart of your website.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.
